Payment companies see big opportunities as colleges go digital

The ministry of human resource and development has advised every educational institution to switch over from cash to digital payment modesPratik Bhakta | ET Bureau | Updated: June 09, 2017, 10:44 IST

In what could be a big boost to the country's digital payments ecosystem, the ministry of human resource and development has advised every institution to switch over from cash to digital, thereby opening up a huge market for banks and digital payments entities.

Bankers said that while the first steps to digital payments has already happened across campuses in the country, the specific set of instructions from the government means that a large number of public colleges and schools could move on to the digital payments mode as well.

The directive released on Wednesday mentions that all payments to vendors, salary wages even collection of fees should only be done through online modes or digitally. Even cheques which were the preferred mode of payment is being discouraged because of logistics issues on cheque deposits and collections.

“We already have a product named Multiple Option Payment System through which we have enrolled around 3,000 institutions to accept all their fees digitally,“ said Manju Aggarwal, deputy managing director in charge of corporate strategy and new business at State Bank of India. “I have instructed my officials to reach out to every institution in their circles with this product to make their entire payments ecosystem digital.“

“We are working with 5,000 institutions and managing around 1 million transactions per annum, we expect this number to go up to 10 million and we plan to increase our tie ups to around 20,000 institutions over the next 15 to 18 months,“ said Dewang Neralla, chief executive of Atom Technologies which deploys terminals as well as payment gateway solutions for merchants.

Another payment gateway company Airpay has started partnering with schools to develop end to end payments solution. The company is seeing 30% growth every quarter in the volume of transactions on their platform for school fees.

“Over 3 lakh students paid digitally through our platform last year for transaction amounts of Rs 1,000 to Rs 3.5 lakh,“ said Amit Kapoor, cofounder of Airpay which works with institutions like Mumbai University, Jamnabai Narsee and Orchids International. Kapoor said the highest volume of transaction came from credit cards with 37% share followed by debit cards with 36% and net banking with 21%.